When Is It Appropriate to Include Sunk Costs in the Evaluation

question 90

Multiple Choice

When is it appropriate to include sunk costs in the evaluation of a project?

• A)include sunk costs when they are relatively large
• B)include sunk costs if it improves the project's NPV
• C)include sunk costs if they are considered to be overhead costs
• D)it is never appropriate to include sunk costs

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Definitions:

Affirmative Action

Policies and practices within organizations aimed at increasing opportunities for historically marginalized groups by taking factors like race, color, religion, gender, or national origin into consideration.

Strict Scrutiny

The most rigorous form of judicial review that requires a law to be necessary to achieve a compelling governmental interest and to be narrowly tailored to achieve that interest.

Racial Minorities

Groups of individuals characterized by their distinct racial identity who are fewer in numbers compared to the larger population.

Supreme Court

The highest federal court in the United States, with ultimate appellate authority and the power to adjudicate on constitutional matters.